This is the last report for 2020. We will be back with a new release after the New Year holiday period.
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New Zealand’s GDP grew by 14.0% in the September 2020 quarter, leading to an annual fall of -2.2% in the September year. While this follows its largest decline on record in the June quarter, it suggests the economy has been more resilient than expected with the result at the upper end of economists’ predictions.
Australia and the Pacific
Media have reported that China has suspended the importation of beef from another Australian supplier. This is now the sixth Australian beef supplier to be hit with import bans this year. No particular reason has been given for the latest suspension.
On 11 December, the Premier of Queensland, Hon Annastacia Palaszczuk announced(external link) Queensland’s inclusion in the Trans-Tasman Safe Travel Zone. As with the other Australian States and Territories that now permit quarantine-free travel from New Zealand, the details regarding quarantine-free travel from New Zealand to Queensland are set out on the Australian Department of Home Affairs website(external link).
On 27 November, Tokelau and Nauru signed a four-year arrangement enabling Nauru to purchase the ability to fish in Tokelau’s Exclusive Economic Zone, starting in 2021. The arrangement significantly strengthens Tokelau’s revenue security and its relationships with the Parties to the Nauru Agreement (PNA) countries (PNA controls the world's largest sustainable tuna purse seine fishery. Members include the Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands and Tuvalu).
Approximately 300,000 farmers have gathered in and around the Indian capital of New Delhi to protest three recent agricultural laws passed by the Government of India. After talks between union representatives and government officials broke down last week, protests have intensified and spread to other Indian cities and overseas, including in Auckland on 6 December (attended by 1500 people), and Wellington on 7 December (20 people). Reports suggest that agriculture accounts for only 15% of India’s GDP while employing over half of the country’s 1.35 billion people. The Indian Government argues the new laws, which aim to deregulate the agricultural sector, will transform the agricultural sector through increased private investment. Farmers argue that the laws will result in unemployment, growing debt, and possible land loss for small-scale farmers.
Earlier this month, Singapore and Hong Kong agreed to postpone the commencement of an air travel bubble to 2021 due to the increase of COVID-19 cases in Hong Kong. The new start date for the bubble will be reviewed later this month by both parties.
Negotiations between the UK and EU on their future relationship, including a future trade agreement, continue. While it appears the parties are near the end-stages, a deal is yet to be struck. The two main sticking points appear to be around fisheries and the so-called “level playing field” – the rules that set the terms of competition between the two sides under a zero tariff/zero quota outcome. A non-negotiated (no-deal) outcome remains a possibility.
Whatever the outcome, New Zealand businesses should prepare for changes from 1 January 2021 when the UK will leave the EU Customs Union and Single Market. Information about how Brexit may affect New Zealanders, including exporters, can be found here.
On 9 December the US Trade Representative (USTR) launched the first-ever enforcement action under the United States-Mexico-Canada Agreement (USMCA), formally requesting consultations with Canada on their administration of Tariff Rate Quotas (TRQs) for dairy products. USTR argues that Canada’s approach of granting a portion of TRQs to Canadian processors contravenes its USMCA commitments and limits US producers’ quota access (USTR Press Release here(external link)). Hon Mary Ng, Canada’s Trade Minister, responded that she was “very confident that Canada is meeting its obligations under USCMA.”
Market reports released this week
MFAT’s monitoring international supply chains report has been updated and can be found here.
An economic update on the Netherlands was prepared by the New Zealand Embassy in The Hague here.
Last week’s global economic and trade update can be found here.
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This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.